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2014 04 03 MDD MinutesMINUTES OF THE REGULAR MEETING OF THE BOARD OF DIRECTORS OF THE BAYTOWN MUNICIPAL DEVELOPMENT DISTRICT April 03, 2014 The Board of Directors of the Baytown Municipal Development District (MDD) met in a Regular Meeting on Thursday, April 03, 2014, at 4:32 P.M., in the Council Chamber of the Baytown City Hall, 2401 Market Street, Baytown, Texas with the following in attendance: Stephen DonCarlos Chris Presley Brandon Capetillo Gary Englert Robert Hoskins Dave Jirrels David McCartney Terry Sain Robert D. Leiper Ignacio Ramirez, Sr. Alisha Brinsfield President Director Director Director Director Director Director Director General Manager General Counsel Assistant Secretary President DonCarlos convened the April 03, 2014 Municipal Development District (MDD) Board Regular Meeting with a quorum present at4:32 P.M., all members were present with the exception of Directors David McCartney who arrived late, Reggie Brewer, Mary Hernandez, and Mercedes Renteria who were all absent. MINUTES a. Consider approving the minutes of the Municipal Decclopment District Board Regular Meeting held on February 06, 2014. A motion was made by Director Terry Sain and seconded by Director Brandon Capetillo approving the February 06, 2014, MDD Board Regular Meeting minutes. The vote was as follows: Ayes: Director Brandon Capetillo, President Stephen H. DonCarlos, Director Gary Englert, Director Robert C. Hoskins, Director David P. Jirrels, Director Chris Presley, Director Terry Sain Nays: None Other: Secretary Reggie Brewer (Absent), Director Mary Hernandez (Absent), Director David McCartney (Not Present for Vote), Director Mercedes Renteria III (Absent) MDD Board Regular Meeting Minutes April 03, 2014 Page 2 o£7 Approved 2. PROPOSED RESOLUTIONS a. Consider a resolution authorizing an interlocal agreement with the City of Baytown for funding the Sanitary Sewer Extension near 4080 East Freeway Project. General Manager Leiper presented the agenda item and stated that Resolution No. 230 authorizes expenditure not to exceed $344,355, to extend approximately 400 linear feet of 12 -18 inch diameter gravity sanitary sewer line across the I -10 right -of way, as well as, a pipeline easement to provide wastewater capacity for development to the tracts on the southwest comer of I -10 and John Martin, including the new Bu -cee's Travel Center. Additionally, he stated that Council approved the agreement at its meeting held on March 27th. A motion was made by Director David P. Jirrels and seconded by Director Robert C. Hoskins approving Resolution No. 230. The vote was as follows: Ayes: Director Brandon Capetillo, President Stephen H. DonCarlos, Director Gary Englert, Director Robert C. Hoskins, Director David P. Jirrels, Director Chris Presley, Director Terry Sam Nays: None Other: Secretary Reggie Brewer (Absent), Director Mary Hernandez (Absent), Director David McCartney (Not Present for Vote), Director Mercedes Renteria III (Absent) Approved RESOLUTION NO. 230 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE BAYTOWN MUNICIPAL DEVELOPMENT DISTRICT AUTHORIZING THE GENERAL MANAGER TO EXECUTE AND THE ASSISTANT SECRETARY TO ATTEST TO AN AGREEMENT FOR FUNDING OF THE SANITARY SEWER EXTENSION NEAR 4080 EAST FREEWAY PROJECT WITH THE CITY OF BAYTOWN; AUTHORIZING PAYMENT OF AN AMOUNT NOT TO EXCEED THREE HUNDRED FORTY -FOUR THOUSAND THREE HUNDRED FIFTY -FIVE AND NO /100 DOLLARS ($344,355.00); AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. 3. REPORTS a. Receive the Economic Development Foundation Annual Report for 2013 MDD Board Regular Meeting Minutes April 03, 2014 Page 3 of 7 General Manager Leiper presented the agenda item and stated that members were provided copies of the report. He stated that the annual report is essentially updates of the quarterly reports already presented to the board and if there were any items needing to be discussed, he would have Mr. Mike or Mr. BJ come to a future meeting to do so. Mayor DonCarlos stated that agenda items 3.c. and 3.d. would be presented after agenda item 3.a. b. Receive an update regarding the CDS Market Research Retail Analysis. Brenda Persons, a representative from CDS Market Research presented the update regarding the Retail Analysis. Ms. Persons stated that this report is an update to the 2008 retail market analysis performed by CDS /Spillette Alliance. She stated that in the old analysis they concentrated on four areas in Baytown that included old downtown and highway 146, but that the updated analysis concentrated strictly on Garth Road and Highway 146 and 110. Ms. Persons stated that the population growth from 2010 to 2013 increased 3.5% and that the households increased 3.7 %. She stated that the projection for 2018 is that the population and the households will increase approximately by double. She stated that the projections are based on population trends and do not include proposed plant expansions. Ms. Persons stated that the emerging trend is that employment opportunities in the area are becoming more focused on the educated worker and that the Hispanic population is rapidly increasing. She stated that from 2000 to 2010, Baytown added 3,318 working age adults, a majority of which had a high school education and that the proportion of college graduates increased from 18.9% to 21.1% of the working age population. She stated that currently 43.4% of the Baytown population is Hispanic compared to 34.6% in 2000 and that Baytown's and Goose Creek ISDs Hispanic shares are similar to that of Hams County and the Houston MSA. Ms. Persons stated that the household income is increasing and from 2000 to 2010 the income cohorts of $100,000 to over $150,000 increased by 15 %. She stated that the 2013 average household income has increased by 2.9% over 2007 and approximately 26.3% of the households in Baytown have incomes in excess of $75,000. She further stated that household size has somewhat decreased in the Baytown Chambers County portion and that most of the other areas are trending toward larger household sizes as is the City of Baytown. She stated that Barbers Hill ISD is noted for its relatively large households and higher share of households with children. Ms. Persons stated that Baytown housing values are going up as new homes are being built and that that in 2000, 17% of the homes in Baytown were valued at over $100,000 and of these, 2.4% were over $200,000. She stated that by 2013, the number had increased to 47.5% over $100,000 and 7.8% over $200,000. She stated that by 2018, the number is expected to increase to 58% based on the current trends. She further stated that in 2000, the homes in Baytown dated from 1939 to 1999 and by 2013, there had been development of 4,367 housing units since the 2000 Census. She stated that by 2018, new development is projected to increase by 22% and that there are several "active" subdivisions in Baytown priced from the low $100,000's to over $250,000. MDD Board Regular Meeting Minutes April 03, 2014 Page 4 of 7 In regards to the employment trends, Ms. Persons stated the by August of 2013, the labor force had risen to 35,023 from the 2000 Census estimate of 29,236 and that the Baytown unemployment rate at 8.9% decreased significantly since 2010. In regards to jobs, she stated that the 2010 jobs as compared to 2000 increased by 16.7 %. She further stated that Baytown's top five (5) businesses and jobs were estimated at 37,098 in 2013, and of that healthcare and social assistance had 6,475 jobs, retail trade had 6,010 jobs, accommodation and food services had 3,836 jobs, wholesale trade had 3,635 jobs, and educational services had 3,089 jobs. In regards to changes in the neighborhood and regional drive times from 2008 to 2013, Ms. Persons stated that the neighborhood trade area (10- minute drive time) had an increased population by 7.5% from 2007 to 2013, in which the population is estimated at 74,350. She stated that the regional trade area (20- minute drive time) from the San Jacinto Mall had an estimated population increase of 13.6% in which the current population is 226,365. She stated that within a 20 minute drive time of Baytown, approximately 27% of the households have incomes over $75,000. Ms. Persons stated that the Baytown retail market is healthy and growing and that 605,925 square feet has been added to the retail market since 2008. She stated that hotels saw the largest increase from 7.6% to 11.1% of the total market share, which is an increase of 273,178 square feet. She stated that an additional 361,271 square feet is under construction for the Chambers Town Center, which will include a Walmart Super Center and provide a new area for development. She stated that the largest increase in sales was in the general merchandise sector in which Bu -tee's coming to Baytown will add 60,000 square feet and Kroger Marketplace coming to Garth Road will add 123,000 square feet. Ms. Persons stated that retail sales increased overall and from 2002 to 2013, sales grew at a rate of 42 %. She stated that retail sales in Baytown bounced back to the 2008 levels after a substantial decline during the recent recession. She further stated that first quarter sales for 2013 were up 8.5% over first quarter 2012 sales and 32.8% over 2008 sales. In regards to comparing Baytown expenditures to other retail centers, Ms. Persons stated that Baytown's resident household's tend to spend the same percentage of income as the other retail centers in the area on food /alcohol away from home and total apparel. She stated that Baytown households spend as large or larger percentages of income on food at home, healthcare, housing related and personal expenditures. She further stated that if Baytown is compared to competitive market areas, Baytown spends less than some. Ms. Persons stated that energy industry growth has a definite positive effect on the retail buying power. She stated that the plant expansions represent more than $13 billion in capital investment; will provide 1,100 to 1,500 full -time permanent jobs at income levels of $86,000 annually on average; will provide over 22,000 skilled construction jobs projected to come to Baytown in the next five years; and swell the population from the current 74,350 to over 101,930 at the peak of construction. She stated that increased households with higher incomes results in an overall increase of $1.3 billion in buying power due to expected employment growth. Additionally, she stated that the estimates are based on the maximum number of construction workers in full time MDD Board Regular Meeting Minutes April 03, 2014 Page 5 of 7 jobs which is over the course of a five year period that they projected to be the completion of all construction. In regards to findings from actual sales compared to expenditures, Ms. Persons stated that residents of Baytown shop outside Baytown for furniture and home furnishings which have a $9 million deficit compared to a $20 million deficit in 2008 and for clothing and clothing accessories which has a $24 million deficit compared to an $80 million deficit in 2008. She further stated that the deficit decreased significantly in these areas. Ms. Persons stated that Baytown is also the recipient of spending from outside residents, in which, electronics and appliances has a $32 million surplus compared to a $25 million surplus in 2008; the health and personal care has a $24 million surplus; the sporting goods, hobby, book and music has a $17 million surplus compared to a $9 million deficit in 2008; and the food and beverage stores has a S 120 million surplus compared to a $50 million surplus in 2008. Ms. Persons stated that the Garth Road retail has increased and that Highway 146 at 110 is the new corridor which is going to open the door for growth and expansion in that area. She stated that the Walmarl Super Center will be the catalyst for new development with proposed new retailers such as Ross, AutoZone, SportClips, Mattress Firm, Whataburger, and Chick -fil -A. She further stated that across Highway 146 a 61.5 acre site is being marketed for retail. Ms. Persons stated that retail is under supplied in the following areas of: computer software, book dealers, coffee shops, clothing stores, boutique stores, general merchandise, lingerie, and flooring stores. She further stated that services under supplied are: attorneys, real estate, insurance, employment agencies, accountants, interior design, clinics /medical centers, pharmacy, and cleaners. General Manager Leiper requested the comparison of actual sales to expenditures for groceries since they were not including in the food and beverage portion of the report. During further discussion, there was an inquiry for Ms. Persons regarding the suggested top three elements to present when soliciting business to Baytown. Ms. Persons stated that retailers will be looking at the population roof tops, the city's income, and expected plant expansions. C. Receive the Baytown Municipal Development District's Revenues and Expenditures Report for the Quarter Ending March 31, 2014. Finance Director, Louise Richman presented the Baytown Municipal Development District's Revenues and Expenditures Report for the Quarter Ending March 31, 2014. She stated that so far everything is on target and MDD is doing well. She stated that sales tax revenue is up almost 4% as compared to the prior year and that the investments revenue is low, but is projected to be over budget approximately S 1,000. She further stated that the low interest income and loan payments were up to date as of March 3 l. MDD Board Regular Meeting Minutes April 03, 2014 Page 6 of 7 Ms. Richman stated that the major expenditures were the quarterly payments for the economic development services, the market research update, park projects, and the traffic signal at 110 and 146 for Walmart. Additionally, she stated that the funds are transferred to the general fund for administrative services to MDD and the debt services for payment. d. Receive the Baytown Municipal Development District's Quarterly Investment Report for the Quarter Ending March 31, 2014. Ms. Richman stated that the MDD ending balance was right at $5.8 million and the return was .1126 %. Additionally, she stated that the projection is that the MDD will exceed the budget in the interest returns. Fliu/:h/:Cel a17697t1Ya7:YY a. Present an update regarding the Baytown Area Water Authority (BAWA) expansion project. General Manager Leiper presented an update regarding the Baytown Area Water Authority (BAWA) expansion project and stated that there were four (4) potential sites and the he is optimistic that by the next meeting he will be able to inform the board the specific site. He stated that the Board selected Jones & Carter to do the design and they are currently doing the environmental survey which is looking good so far. Mayor DonCarlos asked how the project will be funded. General Manager Leiper stated that BAWA has debt capacity for the project and that in the current year budget; the land acquisition is actually funded by future BAWA bonds. He stated that at the next BAWA meeting, an advance fund resolution will be done so that there is cash to purchase the land to provide for the future capacity to put into debt. He stated that he would prefer to go with the buy from cash reserve, but once it's purchased without advance funding authorization you can never go back and repay yourself out of the bond. General Manager Leiper stated that the plant site is going to be 6MGD expandable to 24MGD and that the site projected is larger than originally looked for because there was a good negotiation on the price. He further stated that the additional acreage will allow for the ability to process sludge, which will reduce the operating costs and provide for capacity increase if needed. b. The next Baytown Municipal Development District is scheduled for Thursday, May 01, 2014, at 4:30 P.M., in the Baytown Council Chamber, 2401 Market Street, Baytown, Texas, 77520. General Manager Leiper stated that next Baytown Municipal Development District is scheduled for Thursday, May 01, 2014, at 4:30 P.M., in the Baytown Council Chamber, 2401 Market Street, Baytown, Texas, 77520. 5. ADJOURN MDD Board Regular Meeting Minutes. April 03, 2014 Page 7 of 7 A motion was made by Director Robert C. Hoskins and seconded by Director Terry Sain adjourning the April 03, 2014, MDD Board Regular Meeting. The vote was as follows: Ayes: Director Brandon Capetillo, President Stephen H. DonCarlos, Director Gary Englert, Director Robert C. Hoskins, Director David P. Jirrels, Director David McCartney, Director Chris Presley, Director Terry Sain Nays: None Other: Secretary Reggie Brewer (Absent), Director Mary Hernandez (Absent), Director Mercedes Renteria III (Absent) Approved With there being no further business to discuss, President DonCarlos adjourned the April 03, 2014, Municipal Development District (MDD) Board Regular Meeting at 5:17 P.M. Leticia Brysch, Assistant Secretary' City of Baytown J' ^Ar_5